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Accounting Principles MCQs

Which sentence concerning ABC's financial statements would be correct? ABC Co. has decided to use the straight line depreciation method in its financial statements and the MACRS method in its tax return.

The net cash flow from operations will be less than what it would have been if the straight-line method had been used for tax purposes as well as financial statement purposes

The income tax expenses presented in the income statement in the early years of the useful lives of the assets would be less than the tax payments to the Federal government

Deferred income tax liability will be shown as a liability on the balance sheet

All of the above

Answer

Correct Answer: Deferred income tax liability will be shown as a liability on the balance sheet

Explanation:

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